Weather Again Disappoints

Written by on December 28, 2020 in NatGasWeather - No comments

Monday,  December 28:  Jan’21 nat gas futures sold off sharply Thursday ahead of the long Christmas Holiday weekend to close 9¢ lower at $2.52.  Selling accelerated just ahead of the early Thursday close as the midday GFS model trended notably milder for late December and early January.  Bearish production trends last week also contributed to selling as it increased more than 1 Bcf to 91 Bcf/day, as did a bearish EIA weekly storage report miss Wed.  Recent selling could also have been aided by major players positioning for Jan’21 expiration early this week.  The weekend weather data trended further milder with the GFS losing 12 HDD’s but the European model (EC) a heftier 25+ HDD’s. The onus has been on colder weather patterns arriving to take advantage of the tighter year over year supply/demand balance, and yet again the weather data failed miserably over the weekend, as it’s done in most instances the past several winters

 

GFS vs EC national daily HDD’s vs normal. Modest bouts of demand next 8 days then too warm for the 8-15 day period.

 

Relatively strong demand is expected Tue-Wed as a cold shot impacts the northern US and a second system impacts the West.


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Warmer than normal temperatures are expected over most of the US Jan 2-10. There will still be weather systems with rain and snow, just with little cold air.

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